Everyone is worried about Friday’s jobs report

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Now hiring signs are displayed in front of restaurants in Rehoboth Beach, Delaware, on March 19, 2022.

Stephanie Reynolds | Afp | Getty Images

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Markets – and Powell – are holding their breath for Friday’s jobs report.

What you need to know today

  • Stocks in the US ended Wednesday mixed, with the Dow Jones Industrial Average the only major index to fall. In Asia-Pacific, Japan’s Nikkei 225 rose 0.52% as the country managed to post annual growth of 0.1% in the fourth quarter of 2022, escaping a recession .
  • Two data points released yesterday showed that the labor market is still tight. There were 10.824 million job openings in January, down 410,000 from December but still higher than expected. Private payrolls in February increased by 242,000 month over month, payroll services firm ADP said.
  • PRO Yesterday was International Women’s Day. To commemorate the event, CNBC highlighted this ETF, which invests only in companies led by women – and is expected to rise 20% this year, beating the S&P 500 .

The bottom line

At a Congressional hearing yesterday, Fed Chairman Jerome Powell said the jobs market was “very tight.” It was a positive idea.

Two jobs reports published yesterday showed that the labor market remains strong. First, the US Department of Labor’s Job Openings and Labor Transition Survey, or JOLTS. Although it indicated that job openings fell in December, the total is still uncomfortably high (for inflation-worried economists, anyway): there were 1.9 job openings for every available worker. In fact, according to ADP, private payrolls increased in February, led by an addition of 83,000 in the leisure and hospitality sector. The combination of a tight labor market and – perhaps more importantly – the level of surplus jobs in the service sector mean that risks of inflation from services remain.

There is good news buried in the reports though. (Again, caveat first: It’s only good news in terms of inflation control; it may not be music to workers’ ears.) The JOLTS report showed that workers fell layoffs – a sign of confidence in movement – to the lowest level since May 2021. Layoffs rose sharply, hitting 241,000, an increase of 16% month over month. Wage growth also weakened in February. Workers remaining in their jobs saw an annual increase of 7.2%, down 0.1 percentage points from January; job changers saw a worse drop of 0.6 percentage points.

Markets chewed on that mixed bag of data and didn’t make much of a move. The Dow fell 0.18%, while the S&P 500 edged 0.14% higher and the Nasdaq Composite rose 0.4%. They also stopped selling yesterday after hearing new comments from Powell on Wednesday that the Fed has not decided what to do at its March meeting. “We will be guided by the data that comes in,” Powell said, suggesting that he, like investors, is holding their breath until Friday, when the nonfarm payrolls report is released. more fully published.

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